Suzlon Energy Ltd. (SUEL), the Indian wind-turbine maker that defaulted on bonds in 2012, is seeking to raise about 600 million euros ($822 million) through an initial public offering of its German business, according to people familiar with the matter.
The company is working with banks including BNP Paribas SA (BNP), Deutsche Bank AG and Morgan Stanley on a potential London listing of Senvion SE, the people said, asking not to be identified because the deliberations are private. Hamburg-based Senvion is also planning to raise about 400 million euros from a high-yield bond sale after the IPO, they said.
The move would help Suzlon cut debt that’s reached 170 billion rupees ($2.8 billion), according to a Feb. 14 investor presentation on the company’s website. Suzlon, which failed to repay investors in October 2012 after turbine prices slumped amid overcapacity, is seeking a five-year extension on $209 million of defaulted debt, people familiar said in February.
Suzlon, based in the western Indian city of Pune, is looking to sell around one-third of its holding in Senvion through the offering, according to one of the people. The listing of Senvion, formerly known as Repower Systems SE, could be completed by the end of September, another of the people said.
Senvion’s listing plans depend on Suzlon first reaching an agreement with its bondholders, according to an official at the company who asked not to be identified. Suzlon bondholders could push for the company to be liquidated, which would impact the success of any other transactions, the official said.
A Suzlon spokesman, who asked not to be named citing company policy, declined to comment.
Suzlon Group Head of Finance Kirti Vagadia said last week the company is exploring “a few corporate finance solutions.” Senvion is a “marquee” asset, and European capital markets are showing an appetite for renewable-energy companies again, Vagadia told reporters in the city of Bhuj in Gujarat state.
CNBC-TV18 reported Jan. 21 that Suzlon was considering a London initial public offering for the business. Suzlon delisted Repower from the Frankfurt Stock Exchange in 2011.
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